Beta-Testing Paradise

What Do Consumers
Really Want? Gizmo Makers Use A Big Family-Owned Electronics Store Outside
Chicago To Find Out

By BY Karen Springen
and Daniel McGinn

February 21, 2005

Deep in the back
of the 60,000-square-foot appliance store in suburban Chicago, Yamaha
representative Chuck Lucous is performing his magic. He's working with
a rectangular silver state-of-the-art speaker that's sitting on a special
mount beneath a Panasonic plasma TV. He hooks it up to a DVD player,
and soon music cascades across one area of this retailing gem called
Abt Electronics. The song sounds remarkably rich coming from a single
speaker, and that's the point: this $1,299 Yamaha "acoustic sound
projector" is intended to replicate the performance of a multispeaker
system. Abt became the first store in the United States to sell the
speaker earlier this month--but that's hardly unusual. That big-box
store in your town is a great place to find merchandise. When it comes
to electronics, though, version 1.0 of any new product is likely to
show up at Abt first.

The theater
industry once tried out new plays in New Haven, Conn., before they opened
on Broadway. Carmakers routinely unveil prototypes at auto shows to gauge
public reaction before deciding whether to put a new model into production.
For manufacturers, Abt Electronics plays a similar role, serving as the
industry's unofficial headquarters for beta-testing. The owners say it's
the highest-grossing electronics and appliance store in the country. On
any given week the showroom contains a half-dozen products not for sale
anywhere else. "They give us very candid, honest feedback,"
says Robert Schaffner, district sales manager for Panasonic, which has
guinea-pigged plasma TVs, microwave ovens and DVD recorders in Abt's store.

The Abt
family first set up shop selling radios in 1936 in Chicago's Logan Square
neighborhood. Today the retailer is run by the 66-year-old Bob Abt, son
of the founder, and four third-generation Abt brothers. Their store employs
nearly 1,000. Inside it looks like a cross between a Las Vegas hotel and
a children's museum.

Next
to an aisle of video cameras is a 7,500-gallon aquarium modeled after
one at the Mirage Hotel and Casino; the glitzy atrium includes a gigantic
bubble machine. High-end products abound: a $31,000 La Cornue stove and
a fully furnished $216,000 home theater. Although the privately held family-owned
firm won't disclose sales, the store says it attracts a half-million customers
annually, including Chicago celebs Dennis Rodman and Sammy Sosa. Although
Abt's prices aren't always as low as big-box rivals, customers are attracted
by its selection and staff.

Manufacturers
cite several reasons Abt is the perfect petri dish for new products. Unlike
a Best Buy or Circuit City, Abt's single-store focus means a manufacturer
needs to set up just one display and conduct a single training session
to prepare Abt's 195 sales reps. The Abts are willing to take the risks
of selling a product that the manufacturer might quickly disavow. "We're
on the hook" when a test-marketed product turns out to be a turkey,
says president Mike Abt. "We'll do what it takes to make a customer
happy--we'll figure it out, fix it or take it back." The upside:
early adopters travel from as far as New York to shop at Abt.

What
futuristic devices are on shelves now? Early this month the store featured
a prototype $549 Weber 27000 portable outdoor fireplace. It just sold
its last Whirlpool Personal Valet home dry-cleaning machine; the $799
appliance hasn't sold well, so Whirlpool is dropping it. Omnimount, which
makes furniture to hold plasma and LCD TVs, says its line was inspired
by Abt's staff. "We designed our product based on the things the
Abt reps said people need," says national sales manager Bill Muster.
"They're ahead of the curve." When it comes to finding tomorrow's
electronics, so are its customers.